Belgian insurers bank on consumer goodwill as they defer premium payments until September

The Belgian insurance industry is expected to decline in GWP in 2020, as insurers allow customers to defer payments until September 30th, says GlobalData, a leading data and analytics company.

GlobalData revised its forecasts for the Belgian insurance market following the COVID-19 pandemic. The sector is now expected to see very slim growth of 0.7% compound annual growth rate (CAGR) between 2019-23, compared to 2% in pre-COVID-19 forecasts.

Deblina Mitra, Insurance Analyst at GlobalData, comments: “Following decline in 2020, the Belgian insurance industry will not reach 2019 levels again until 2022. However, despite large losses, insurers are likely to gain a considerable amount of goodwill from the public after the industry initiated efforts to mitigate the negative affect of the COVID-19 outbreak on domestic consumers.”

Belgian insurers have announced deferments of premium payments for individuals at risk of unemployment or reduced income ad business units facing uncertainty, until September 30th.

Mitra continued: “The economic uncertainty and high risk of unemployment following the pandemic is expected to adversely impact the premium earnings of Belgian insurers. Therefore, its strategy of allowing deferred payments could benefit them beyond just raising goodwill. Helping businesses stay afloat during this tough time will benefit insurers in the long run.”

Ben Carey-Evans, Insurance Analyst at GlobalData, added: “This goes against what we have seen in other countries. In the UK, for example, there have been disputes over pay-outs, very few payment holidays or deferments. The Belgian industry is likely to face a larger dip due to this, but it may see a more pronounced long-term recovery, as consumer trust will be high. Customers in other countries may have lasting memories of rejected claims and may question the benefits of certain policies.”

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